Labour on defensive as gap closes

Two polls over the weekend showed Labour and the Tories to be virtually neck and neck in the wake of George Osborne’s Budget amid criticism that the chancellor had been allowed to score a significant political victory.

Labour has been struggling to clarify its line on the surprise overhaul of pensions and savings rules unveiled by the Chancellor last week and Mr Miliband was seen as having dodged taking a position on the issue in the Commons. While some MPs have since condemned the move, others have urged the leadership to support it.

Shadow Work and Pensions Secretary Rachel Reeves insisted the party backed the shake-up in principle.

“We support reforms to the pension market, so people can get a better deal and have more flexibility, especially at the moment, when people are just not getting a very good deal on their annuity,” she told Sky News’s Murnaghan programme.

“We’re talking to people here who are coming up to retirement, who have saved all their life, and put things aside.

“I think we can trust those people to make sensible decisions about how they want to support themselves in retirement.”

Mrs Reeves, MP for Bramley in Leeds, argued that the Government had not “gone far enough” in the Budget, and should also impose a cap on fees and charges by pensions and annuities firms.

Acknowledging that some in her party had concerns about the plans, the MP said she wanted to be certain that the measures would “benefit people on modest incomes and not just the privileged few”.

Great Grimsby MP Austin Mitchell joined ex-frontbencher Tom Watson in voicing opposition to the pensions overhaul.

“This is a mistake and I’m sure many Labour colleagues share that view,” he said. “The Government shouldn’t have done it and we shouldn’t be supporting them.

“It could open the way to more old people facing attempts to con them.”

But Labour backbencher and Bassetlaw MP John Mann pointed to polls that had the Tories trailing Labour by only one percentage point – within the margin of error.

“Of course it’s a warning shot,” he said. “It would be naive to think otherwise, and the message is that we need to be much clearer and simpler in putting across what our alternative is, and what we stand for.

He went on: “We’re trying to be too clever – too many nuanced messages to too many different people.

“I think the Tory bounce this week is a temporary one, but there was a pretty simple message from George Osborne, ‘we’re going to help out pensioners with the mess on annuities’.

“That’s a popular message because it’s true. We need to be adopting simple, clear messages, obviously backed by policy that stand up to scrutiny.”

Work and Pensions Secretary Iain Duncan Smith said Labour’s “carping and moaning” demonstrated that “they actually don’t trust people, they all think the government spends your money better”.

He told Sky News: “People like Tom Watson and others, the debate inside the Labour party is furious at the moment.

“Why? Because honestly the beating heart of Labour does not trust people with their own money and that’s why they’re struggling over this.”